Lujan Grisham calls for 13 percent spending hike in $7.1B budget

Gov. Michelle Lujan Grisham is sworn in as the 32nd governor of the state of New Mexico on Tuesday, January 1, 2019, at the state Capitol in Santa Fe, New Mexico.(Photo: Luis Sanchez Saturno/AP)

On the campaign trail, Gov. Michelle Lujan Grisham repeatedly said she was going to reform New Mexico's public school system and funnel more money into programs that served children.

On Thursday, the governor released a proposed budget of $7.1 billion for the 2020 fiscal year, earmarking some 46 percent — about $3.3 billion — to improve the state's public education system, generally ranked as one of the worst in the nation.

Much of that money is targeted at specific programs and initiatives, such as a mandatory K-5 Plus summer learning program for students in about 300 struggling schools (about $120 million), expanded pre-K programs that will increase statewide enrollment of eligible 4-year-old children from 42 percent to 80 percent over the next five years ($60 million) and raising all school employee salaries by at least 6 percent.

Those pay raises, accompanied by educator professional development programs, mentoring initiatives and a teacher supply fund, will cost $194 million.

"We are putting our priorities into policy," the governor said in a news release. "Setting a new direction for public schools in New Mexico starts with supporting teachers, principals and educational personnel through significant pay increases."

New Mexico's current budget is about $6.3 billion, with some $2.7 billion of that, or 43 percent, going toward K-12 public education. Democratic Sen. John Arthur Smith of Deming, head of the Senate Finance Committee, said he believes the $7.1 billion — a 13 percent increase — would make for the biggest budget in the state's history. He said the budget to be proposed next week by the Legislative Finance Committee is "in that ballpark."

The Legislature convenes Tuesday for a 60-day session.

Lujan Grisham's proposal, based on an optimistic view of state revenues and a potential surplus of $1.1 billion in oil and gas, also includes an additional $46.5 million for the Children, Youth and Families Department, one of the most scrutinized — and beleaguered — agencies in state government. Nearly half of that money would go to expand early childhood education.

Another $4 million would be used to create more than 100 additional positions in the department's Protective Services Division, which investigates reports of child abuse.

The governor's proposed budget for economic development initiatives puts an emphasis on outdoor tourism, with $6 million in additional dollars aimed at marketing and promotion to go along with the creation of an Office of Outdoor Recreation, which boosters of ecotourism have wanted for a long time.

She also set aside money to enroll an additional 28,000 eligible New Mexicans in Medicaid, and her budget provides funds to move ahead with a proposal to allow consumers who do not qualify for the health insurance program to buy coverage through it.

Lujan Grisham also wants to place $1.8 billion — about 25 percent of the overall budget — in reserves to make sure the state could meet expenses during a potential economic downturn. The Department of Finance and Administration under former Gov. Susana Martinez recommended reserves of about 25 percent for this year's budget.

"We feel like the governor's budget does a lot for New Mexico children while being fiscally responsible," said Olivia Padilla-Jackson, secretary of the Department of Finance and Administration, which functions as state government's central budget office.

But budget hawks may argue for larger reserves as they warily eye the current oil boom — and the inevitable if unpredictable bust that may come with it.

When the session begins Tuesday, liberals might push for more spending, arguing that the only way to ween the state off of its reliance on oil is to put money into schools, roads, health care and other services that help diversity New Mexico's economy.

"The most crucial battle is going to be over the size of reserves," said Sen. Jerry Ortiz y Pino, D-Albuquerque . "We've got to put the money to better use than stuffing it under the mattress."

In terms of one-time spending proposals, the budget includes $500,000 to fund an ethics commission that some state legislators want, though that money is dependent upon the Legislature acting on the initiative during the session.

Another $300 million in one-time funds would be allocated to pay off a backlog in film tax credits and an underfunded Health Care fund, among other "backfill" projects.

And another $11 million one-time infusion would be pegged for the state's Job Training Incentive Program.